Goldman Sachs cuts 2019 oil demand growth forecast to 1 million bpd

The Wall Street bank revised its forecast down to 1 million barrels per day (bpd), from 1.1 million bpd but left its 2020 demand growth estimate broadly unchanged at 1.4 million bpd.

However, it stuck to its 2020 price forecast for Brent crude at $60 a barrel, flagging the willingness of the Organization of the Petroleum Exporting Countries (OPEC) to sacriﬁce market share.

“Our oil supply-demand outlook for 2020 calls for additional OPEC production cuts to keep inventories near normal,” Goldman analysts wrote in a note dated Sept. 9.

“We continue to expect OPEC will sacrifice market share in line with leadership commentary at its June meeting, which we believe will lead to Brent prices of around $60/bbl.”

Crude oil prices have shed nearly 20% from 2019 highs hit in April, partly because of an escalating trade war between the United States and China, which is expected to hurt the global economy and, in turn, demand for oil.

Other banks, including Morgan Stanley and Barclays, have also flagged risks to oil demand as a result of economic uncertainties.

Morgan Stanley last month lowered its oil price and demand forecasts for the rest of the year, citing a weaker economic outlook, faltering demand and higher shale oil output.
Source: Reuters (Reporting by Brijesh Patel in Bengaluru; Editing by David Goodman)